Financial brokerage firm Bernstein predicts that Bitcoin (BTC) could reach a staggering high of $150,000 during the 2024-2027 cycle.
According to commentators, Bernstein’s report highlighted the cyclical nature of Bitcoin price cycles, which typically follow four-year patterns coinciding with Bitcoin halving events.
With the next Bitcoin halving expected in April 2024, the report suggests that investing in a winning Bitcoin miner could also offer a way to gain exposure to the cryptocurrency market.
According to the report, the next halving is expected to push Bitcoin to reach a cycle high of $150,000 by mid-2025. The prediction has sparked considerable interest in the cryptocurrency market and led to a closer examination of Bitcoin mining stocks, particularly in North America.
The report said that Bitcoin miners are undergoing a transformation into industrial-scale enterprises, and North America is steadily gaining market share in this evolving landscape — overtaking China.
This shift is attributed to strong operational efficiency, low production costs due to cheap electricity, high liquidity, and robust balance sheets among these miners.
Bernstein also expressed a preference for Riot Platforms (RIOT) and CleanSpark (CLSK). The broker gave both companies an “outperform” rating.
Analysts Gautam Chhugani and Mahika Sapra at Bernstein noted that Riot and CleanSpark are market share consolidators with a robust operational edge, primarily driven by their self-mining models.
These companies benefit from low power costs and do not carry heavy debt loads, contributing to their competitive advantage in the market.
Meanwhile, the report was less enthusiastic about Marathon Digital (MARA), assigning it a “market-perform” rating with an $8.30 price target.
Despite being the largest miner in the industry, Marathon Digital has subpar production costs, placing it in the middle of the cost curve. Additionally, the company lacks an operational edge and is dependent on hosting partners, according to Bernstein.
The report added that Riot and CleanSpark stand out due to their counter-cyclical investment strategy in Bitcoin self-mining capacity. While some miners have shifted their capacity towards AI and high-performance computing, both of these companies continue to invest in Bitcoin mining.
Bernstein anticipates that this counter-cyclical approach will pay off as the Bitcoin price cycle turns in their favor.